If your business is operating outside the benchmarks, you may move to a higher audit risk. If the business attracts the ATO’s attention, you need to:
- check that income and deductions for the business have been correctly recorded and reported, and
- review their record-keeping practices to ensure they meet the legal requirements.
What are the benchmarks for child care services?
The key benchmark ratio for this industry is total expenses to turnover. This ratio is likely to be the most accurate predictor of business turnover.
| Key benchmark ratio | Annual turnover range | ||
| $65,000 – $200,000 | $200,000 – $600,000 | More than $600,000 | |
| Income tax return | |||
| Total expenses/turnover | 52% – 63% | 72% – 86% | 78% – 87% |
| Average total expenses | 58% | 79% | 83% |
The following benchmarks can be used as a guide for businesses to review their performance and business practices against other similar businesses.
| Benchmark ratio | Annual turnover range | ||
| Income tax return | $65,000 – $200,000 | $200,000 – $600,000 | More than $600,000 |
| Labour/turnover | 23% – 45% | 38% – 51% | 44% – 52% |
| Rent/turnover | 9% – 14% | 7% – 12% | 7% – 11% |
| Motor vehicle expenses/turnover | 5% – 7% | 1% – 3% | 1% |
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